China’s central government has announced a 30-point plan to boost domestic spending and consumption. The measures are part of a wider policy of encouraging Chinese consumers to spend more and save less. By Leatherbiz.

Analysts at ING Bank said after the government’s announcement on March 16 that China has one of the highest savings rates in the world. They explained that millions of people in China feel the need to save a higher proportion of their incomes than consumers elsewhere because they feel the need to put money aside for retirement or for their children’s education.

The new plan seeks to address this by promising increased aid for students, increased pensions and improved health insurance.

ING said expanding middle-class consumption in particular is a key component of the plan. “The current consumption landscape still tends to be weighted towards either end of the scale,” the financial services provider commented. “Many products are on the low-price and low-quality side or on the ultra-premium side.”

To address this, the plan mentions the need for Chinese companies to build “quality brands” and bring well made products to the domestic market. It also mentions expanding a trade-in programme for products such as cars.

Another aspect of boosting consumption will be to increase employees’ right to take annual leave at times of their choice throughout the year. This, observers have said, will boost travel and tourism, including shopping tourism, at times outside the major national holiday periods.

Credit: City of Haikou.